Only 2 Numbers to Know for Internet Businesses

Fail Quick & Cheap

The Best Execution Wins Out

How to Get a Second Meeting with Howard Morgan

Howard Morgan Partner First Round Capital

When asked “How [an entrepreneur gets] from first meeting to second meeting [with him]”, Morgan said, “Personal qualities are the first filter: integrity, intelligence, and not too dogmatic. Then [he considers] if it is a big enough market. [] [Morgan said the most common mistake in the] first pitch is to say something that is not credible [like] wildly overstating a market size. Chemistry with the entrepreneur is also important considering you will be working together for the next few years.” Howard Morgan, Want to Know How First Round Capital was Started? by Mark Suster, April 20, 2011; http://www.bothsidesofthetable.com/2011/04/20/want-to-know-how-first-round-capital-was-started/

Howard Morgan Partner First Round Capital

“[Morgan] comments [that] wire frames or some progress toward a product should be achievable given how inexpensive it is to produce. [] [Morgan] cites a quote from [composer] Stephen Sondheim “Having just the vision is no solution, everything depends on execution.” He contrasts incremental improvement against postponed perfection and states the importance of execution and the ability to ship product. He says many people often have similar plans but the best execution wins out.” Howard Morgan Want to Know How First Round Capital was Started? April 20, 2011; http://www.bothsidesofthetable.com/2011/04/20/want-to-know-how-first-round-capital-was-started/

Howard Morgan Partner First Round Capital

Morgan explained his firm’s investing strategy. “We were the first ones to do seed-stage investing professionally. [] We also knew [] how the venture model worked, where you couldn’t afford to fail. The key to our strategy is failing cheap. The one lesson [] for all entrepreneurs is, ‘If you’re going to fail, fail quick and cheap.’ There’s no stigma in failing that way. But if you blow a hundred million bucks, big stigma.” Howard Morgan, from the book, Mastering The VC Game by Jeffrey Bussgang, copyright 2010, pg 65-66

Howard Morgan Partner First Round Capital

“[] If you have a business that's based around the internet, basically only two numbers we need to know: What's the cost to acquire a customer? What's the lifetime customer value? If the lifetime customer value is higher the than cost to acquire: you've got a business. If it isn't: you don't.” Howard Morgan, Only two numbers matter; http://videos.gust.com/video/Only-two-numbers-matter;recently_viewed